A Busy First Year for PPLI

A Busy First Year for PPLI

The Public Policy Legal Institute began in April 2017, and, for a small, all-volunteer  organization, had a pretty busy first year:

Litigation: PPLI filed two amici curiae briefs in the Supreme Court of the United States, both in No. 16-1436, Trump v. IRAP. The first requested the Court to grant certiorari in the case in order to review the opinion of the U.S. Court of Appeals for the Fourth Circuit and that opinion’s “welcome restraint” legal theory, which could threaten the freedom of political candidates to speak; the Court did grant certiorari in that case. The Bureau of National Affairs, a legal journal, reported on and analyzed the PPLI cert petition. The second requested the Court to vacate the Fourth Circuit’s decision and to speak strongly against the “welcome restraint” legal theory; the Court vacated the Fourth Circuit’s decision with an unusual reference to U.S. v. Munsingwear, which emphasized that the Fourth Circuit’s decision should not be cited in future litigation by lower courts. Both briefs were filed in conjunction with the Institute for Free Speech, another charity working to protect advocacy and free expression.

Government Regulation: PPLI filed comments with the Internal Revenue Service concerning the proposed Form 1024-A. The comments noted that the proposed form did not respond to Congressional concerns clearly enunciated in the legislative history of Internal Revenue Code § 506, especially those related to the amount of work engaged in by the Service during processing of applications for determination letters by section 501(c)(4) organizations. The comments propose that the Service adjust its efforts to implement section 506 by shifting resources to educational activities, and utilize the Service’s recent experience with “self-declaring” organizations and applications and with analytics to deploy available resources.

Public Education: From April to December, PPLI published 39 posts on its blog Vox PPLI. Topics included:

One post which received significant attention in the legal and trade media was the October 6, 2017, post on a Treasury Inspector General for Tax Administration’s September 28 report noting that liberal organizations received scrutiny by the IRS during the “scandal” period. News media portrayed the report as justifying the IRS’s targeting actions. The PPLI post noted that the treatment of liberal organizations was not news, since the Washington Post, congressional committees and many others had already reported on this treatment shortly after the scandal became public. The post also explained the difference between the treatment of liberal organizations (under an older established process, known as Touch-and-Go or “TAG,” with procedural and policy safeguards) and the later, rogue treatment of mostly conservative organizations (under what was known as “Be On the Look Out” or “BOLO”) without those safeguards. Former Deputy Assistant Attorney General for Civil Rights Justin Levitt called the post “an interesting primer” on the differences between treatment afforded the two types of groups.


Fitzgibbons on How Government Disclosure of Mandatory Filings Hurts

Fitzgibbons on How Government Disclosure of Mandatory Filings Hurts

Mark Fitzgibbons, a member of the First Tuesday Lunch Group, has an article in yesterday’s Daily Caller about how governments engage, probably unintentionally, in “doxxing.” For those not entirely current on slang, “dox” means

verb (used with or without object)doxed or doxxed, doxing or doxxing.
1. Slang. to publish the private personal information of (another person) or reveal the identity of (an online poster) without the consent of that individual: The professor was doxed by a bitter student who failed her class. Several players doxed the programmer because the final version of the game disappointed them.

Disclosure is often cited as an unalloyed good, as in Justice Louis Brandeis’ famous formulation: “”Publicity is justly commended as a remedy for social and industrial diseases. Sunlight is said to be the best of disinfectants; electric light the most efficient policeman.” But remember that Brandeis also said: “I abhor averages. I like the individual case. A man may have six meals one day and none the next, making an average of three meals per day, but that is not a good way to live.”

Mark’s piece shows how government disclosures lead inevitably to doxxing; that is, after all, the point of government-mandated disclosure — to force people to reveal publicly what they would generally prefer to keep private. We live in a far different world today from when many of these disclosure requirements were originally hatched. Today, what was once a shield against miscreants has become a sword used by them.

Like any powerful tool, disclosure can be a force for good. Its use should not be mindless. And those who are subject to it must take special precautions to defend themselves.


How the Two Tax Bills Differ on Political and Exempt Organizations

How the Two Tax Bills Differ on Political and Exempt Organizations

The House of Representatives and Senate are working quickly to enact tax reform legislation, some of which affects political and tax-exempt organizations. Quarles & Brady, from Chicago, has a nice chart showing the differences between the House and Senate bills on tax-exempt organizations.

[UPDATE: And Jones Day has an even better one1503238683_2_House-Senate Tax Bill Comparison Chart December 4 2017 with revenue scores. Thanks to Cathy Livingston.]

In brief, the House bill now contains many more provisions dealing with exempt organizations’ speech, while many of the exempt organizations-related provisions in the Senate bill were removed in the final deliberations, including the major revisions making Section 4958 “intermediate sanctions” provisions much more complicated and onerous.

Not mentioned in the Quarles chart is that Section 13602 of the Senate bill and Section 3803 of the House bill (the language of both versions is identical), subjecting compensation of over $1 million to an additional Section “4960,” described as a tax on excess tax-exempt organization executive compensation, also covers political organizations exempt from tax under Section 527. In other words, PACs and other organizations described under Section 527 are taxed if they pay compensation of more than $1 million.

One additional point  is section 3305 of the House bill and section 13308 of the Senate bill (the language of both versions is the same) which amends IRC § 162(e) to deny business deductions for lobbying expenditures to local government lobbying; state and federal lobbying has long been non-deductible, but local lobbying had previously been deductible under § 162(e)(2) and (7).